2006 (4) TMI 33 - HC - Service Tax

Service Tax Assessment Writ jurisdiction (1) Demand for furnishing of records necessary for finalizing assessment proceedings (2) Jurisdiction of assessing authority (3) Article 226 of the Constitution of India

Summary

Issues:
1. Allegations of coercion and harassment by respondents for recovery of service tax.
2. Delay in filing returns and furnishing data by the petitioner.
3. Dispute over taxable components of income received by the petitioner.

Analysis:

Issue 1: Allegations of coercion and harassment
The petitioner claimed that the respondents coerced them to pay Rs. 20 crores as service tax without a proper assessment or quantification of the amount. The respondents argued that the petitioner delayed assessment proceedings by not cooperating and filing returns on time. The petitioner voluntarily paid the amount under protest. The court found no evidence of coercion or harassment, dismissing the petitioner's claim.

Issue 2: Delay in filing returns and furnishing data
The petitioner delayed filing returns and providing necessary data for assessment proceedings. The respondents argued that the petitioner's lack of cooperation caused delays. The court noted that the petitioner sought time to compile data due to the complex nature of their operations. The court directed the petitioner to cooperate and provide the required information within a specified timeline for expeditious completion of assessment proceedings.

Issue 3: Dispute over taxable components of income
The petitioner disputed the taxability of certain components of their income. The court held that the assessing authority has the jurisdiction to determine tax liability, even if certain components are later found to be non-taxable. The court rejected the petitioner's contention that non-taxable components should prevent the assessment proceedings. The court emphasized that premature intervention through a writ petition was unwarranted and that proper procedures, including obtaining permission from the Committee on Disputes, were not followed by the petitioner.

In conclusion, the court dismissed the writ petition, stating that there was no coercion or harassment by the respondents. The court directed the petitioner to cooperate in providing necessary information for assessment proceedings. The court upheld the jurisdiction of the assessing authority to determine tax liability, even in cases where certain income components may later be deemed non-taxable.